Returning a car with outstanding finance?

[mattk1]

Hey guys,

Got a quick question here regarding returning a car to the finance company with approximately 2 years of payments remaining.

The car belongs to my wife's sister and she simply can no longer afford it. I am tempted to take over it as it's a nice car but I don't really need it. If she can simply give it back to the finance company then it would problem solved but I'm not sure how it works out here.

Can anyone fill me on the details of this sort of thing?

Cheers guys

[stoneyboy]

I'm sure they will willingly take it off her hands just don't expect anything in exchange for it.

She is in essence merely defaulting on a loan.

Edited August 29, 2015 by stoneyboy

[stevenl]

She can return it. The bank will then resell it, any difference between outstanding balance and sales price will result in a debt for her, if they sell it for more the profit is for the bank.

Better to try and sell privately, if necessary have the buyer take over the loan (requires bank approval), preferably pay it off in one go.

Or if you trust you could take over the payments, and when all is paid for and she has the blue book in her name go to DLT and officially have your name on it as owner.

[meatboy]

there could be a small problem,did she claim the tax back if the engine is 1.5 or less?

dont these finance co.s add all the remaining interest as well.

only 2yrs.left,i would pay it off and then sell private,WHY because she might end up with a bad debt against her.

[BarnicaleBob]

Another problem would be if she purchased the car on the government first time auto buyers100,000 baht rebate sachem that was in effect at the time she bought it. If that is the case she will not be allowed to sell it for five years and if she sells it before then she must repay the government the 100,000 baht. You better make sure the car was not purchased under that program before you do anything.

[callaway]

Whats the car and what is the outstanding debt on it?

[crazykopite]

Suggest to her she puts it on baht and sold I am sure she could get some of her money back as well as finding someone to take over the last two years of finance !

[slipperylobster]

They just will stop her on the road, kick her out of the car, and repossess it.

If she cannot sell it (and she probably cannot because she owes too much and only put a minimum deposit on it)...then she is pretty much done. The worst thing she can do, is what many resort to....they borrow from a chinese lender, and let them hold the car. Then they run out with the chinese money and put a downpayment on another one....

true story...canadian guy's wife did this in udon.

[stevenl]

They just will stop her on the road, kick her out of the car, and repossess it.

If she cannot sell it (and she probably cannot because she owes too much and only put a minimum deposit on it)...then she is pretty much done. The worst thing she can do, is what many resort to....they borrow from a chinese lender, and let them hold the car. Then they run out with the chinese money and put a downpayment on another one....

true story...canadian guy's wife did this in udon.

Since you don't know anything about the exact situation here, your speculation is of no value at all.

[whiteman]

well mattk we are waiting for your comments after some good advice so is the cat bought with the 100k discount how do u feel taking over some ones debt would you do that if you were living over seas??????

[Dogbreath]

Typically, if she givers it back to the bank, they will sell it to a wholesaler. They will apply the proceeds to the loan balance. If there is money left over, they may give her the excess. If the proceeds from the sale don't cover the loan balance, she is liable for the balance and it will probably affect her ability to get credit in the future. Ask the bank what the payoff is. If it's near wholesale value, you may want to sell it for her (if it is a really nice clean car) as you will be able to get 10-20% more in a private sale beyond the wholesale price.

Good luck.

[retarius]

You need to know who the guarantor for the debt is. The guarantor is responsible for settling with the bank for any outstanding debt.

[stevenl]

You need to know who the guarantor for the debt is. The guarantor is responsible for settling with the bank for any outstanding debt.

Quite often there is no guarantor.

[johnburger]

Why you do not ask the funding agency ? Is quite simply !!!

[mattk1]

Wow guys lots of helpful replies here, much appreciated

I can confirm that the car was bought under the governments tax back scheme and around 70k Baht was returned to my wife's sister (long gone )..

From the comments and suggestions I think what I will do to help her out since I have time on my hands, is get it looking immaculate and then advertise it for her on some of the market websites etc.

If I am able to generate more than what the car currently owes, inclusive of the 70k Baht tax return, then it will be nice for her to have a little bit of cash in her pocket. Of course I wont mention it until the car is actually sold so as not to get her hopes up

I have concluded that this I the best plan of attack as opposed to just simply returning it to the finance company

Cheers guys and have a great day.

[meatboy]

Wow guys lots of helpful replies here, much appreciated

I can confirm that the car was bought under the governments tax back scheme and around 70k Baht was returned to my wife's sister (long gone )..

From the comments and suggestions I think what I will do to help her out since I have time on my hands, is get it looking immaculate and then advertise it for her on some of the market websites etc.

If I am able to generate more than what the car currently owes, inclusive of the 70k Baht tax return, then it will be nice for her to have a little bit of cash in her pocket. Of course I wont mention it until the car is actually sold so as not to get her hopes up

I have concluded that this I the best plan of attack as opposed to just simply returning it to the finance company

Cheers guys and have a great day.

good decision M1.what you could do is if she has insurance on the car have a look at what they value it.

i wouldnt be suprised that she only has POR-ROW-BOR gov.cover.

[stevenl]

Wow guys lots of helpful replies here, much appreciated

I can confirm that the car was bought under the governments tax back scheme and around 70k Baht was returned to my wife's sister (long gone )..

From the comments and suggestions I think what I will do to help her out since I have time on my hands, is get it looking immaculate and then advertise it for her on some of the market websites etc.

If I am able to generate more than what the car currently owes, inclusive of the 70k Baht tax return, then it will be nice for her to have a little bit of cash in her pocket. Of course I wont mention it until the car is actually sold so as not to get her hopes up

I have concluded that this I the best plan of attack as opposed to just simply returning it to the finance company

Cheers guys and have a great day.

good decision M1.what you could do is if she has insurance on the car have a look at what they value it.

i wouldnt be suprised that she only has POR-ROW-BOR gov.cover.

Unlikely with the car on finance

[ericthai]

Wow guys lots of helpful replies here, much appreciated

I can confirm that the car was bought under the governments tax back scheme and around 70k Baht was returned to my wife's sister (long gone )..

From the comments and suggestions I think what I will do to help her out since I have time on my hands, is get it looking immaculate and then advertise it for her on some of the market websites etc.

If I am able to generate more than what the car currently owes, inclusive of the 70k Baht tax return, then it will be nice for her to have a little bit of cash in her pocket. Of course I wont mention it until the car is actually sold so as not to get her hopes up

I have concluded that this I the best plan of attack as opposed to just simply returning it to the finance company

Cheers guys and have a great day.

You should speak to her and let her know what you are trying to do. Allot of time when you think you are helping someone out they are not happy with the decision you have made for them.

Just tell her you will try and sell the car for at least enough to pay off the loan and if lucky maybe a little more. If not and you get a buyer and then she dont agree to sell you will have a problem with everyone.

[Suradit69]

Typically, if she givers it back to the bank, they will sell it to a wholesaler. They will apply the proceeds to the loan balance. If there is money left over, they may give her the excess. If the proceeds from the sale don't cover the loan balance, she is liable for the balance and it will probably affect her ability to get credit in the future. Ask the bank what the payoff is. If it's near wholesale value, you may want to sell it for her (if it is a really nice clean car) as you will be able to get 10-20% more in a private sale beyond the wholesale price.

Good luck.

There was probably something in the loan agreement about early pre-payment or early termination. There's usually a fee to compensate them for the loss of interest they would have earned on the final two years payments and any additional costs they want to claim for selling it again.

If they have to re-sell it, they'll be mainly concerned with doing it quickly and they'll have little motivation to price it to generate any cash back for her. At best she'll probably get out of the deal with zero cash back, but she could still find she's got at least a small amount of loan balance to pay off.

[slipperylobster]

They just will stop her on the road, kick her out of the car, and repossess it.

If she cannot sell it (and she probably cannot because she owes too much and only put a minimum deposit on it)...then she is pretty much done. The worst thing she can do, is what many resort to....they borrow from a chinese lender, and let them hold the car. Then they run out with the chinese money and put a downpayment on another one....

true story...canadian guy's wife did this in udon.

Since you don't know anything about the exact situation here, your speculation is of no value at all.

Let me see if I understand then....

She cannot afford to make payments....correct? If so..she probably had somebody guarantee the initial loan and she put a very small deposit on the car.

Option 1: Sell it and Pay it off. How much was the downpayment?...(we don't know)...and if the car is over one year old, it has lost a great deal of value. Not likely she will get a price equal to what she still owes. She could make up the difference... if she had the difference, then she could afford payments. Most people with borderline income who buy cars do not put down large deposits. I bet her deposit was less that 80,000 baht...and somebody else guaranteed the loan. It is pretty normal.

Option 2: Don't sell it...borrow money and incur an even greater debt (which I am referring to). This will probably happen. Let's wait and see. According to the poster, she has not agreed yet to sell it. You can bet that the person who guaranteed the loan is pressuring her to make payment.

It is quite possible she has been late on payments. That would be similar to my canadian friend's wife who just had her car repossessed. Once again, I do feel there is an imminent problem of being repossessed. Now if this women wanted to simply turn in the car....the one who guaranteed the loan may still be on the hook for money.

Lots of presumptions on my part...but I gave an example of what happens when payments are not made for several months....and nothing is done. It can and will be repossessed.

[stevenl]

They just will stop her on the road, kick her out of the car, and repossess it.

If she cannot sell it (and she probably cannot because she owes too much and only put a minimum deposit on it)...then she is pretty much done. The worst thing she can do, is what many resort to....they borrow from a chinese lender, and let them hold the car. Then they run out with the chinese money and put a downpayment on another one....

true story...canadian guy's wife did this in udon.

Since you don't know anything about the exact situation here, your speculation is of no value at all.

Let me see if I understand then....

She cannot afford to make payments....correct? If so..she probably had somebody guarantee the initial loan and she put a very small deposit on the car.

Option 1: Sell it and Pay it off. How much was the downpayment?...(we don't know)...and if the car is over one year old, it has lost a great deal of value. Not likely she will get a price equal to what she still owes. She could make up the difference... if she had the difference, then she could afford payments. Most people with borderline income who buy cars do not put down large deposits. I bet her deposit was less that 80,000 baht...and somebody else guaranteed the loan. It is pretty normal.

Option 2: Don't sell it...borrow money and incur an even greater debt (which I am referring to). This will probably happen. Let's wait and see. According to the poster, she has not agreed yet to sell it. You can bet that the person who guaranteed the loan is pressuring her to make payment.

It is quite possible she has been late on payments. That would be similar to my canadian friend's wife who just had her car repossessed. Once again, I do feel there is an imminent problem of being repossessed. Now if this women wanted to simply turn in the car....the one who guaranteed the loan may still be on the hook for money.

Lots of presumptions on my part...but I gave an example of what happens when payments are not made for several months....and nothing is done. It can and will be repossessed.

For your option 1: more likely is that it is a longer lasting loan, especially since the car was bought with tax back scheme, which ended 2012. That means very likely she was on a 5 year loan agreement with still 2 to go. This means she has paid of a big part, and should be able to sell and get some money in hand.

And that is also speculation, but much more likely than your situation.

Edited August 30, 2015 by stevenl

[Sviss Geez]

They just will stop her on the road, kick her out of the car, and repossess it.

They most definitely will not do that, there are proper procedures for repossessing vehicles.

Edited August 30, 2015 by Sviss Geez

[meatboy]

They just will stop her on the road, kick her out of the car, and repossess it.

They most definitely will not do that, there are proper procedures for repossessing vehicles.

proper procedurers do you mean the 2 guys on a bike wearing black jackets and helmets.

[slipperylobster]

They just will stop her on the road, kick her out of the car, and repossess it.

They most definitely will not do that, there are proper procedures for repossessing vehicles.

proper procedurers do you mean the 2 guys on a bike wearing black jackets and helmets.

Not if you make yourself unavailable... They will do same as they do in the USA... repo. and without your permission.

[kartman]

Wow guys lots of helpful replies here, much appreciated

I can confirm that the car was bought under the governments tax back scheme and around 70k Baht was returned to my wife's sister (long gone )..

From the comments and suggestions I think what I will do to help her out since I have time on my hands, is get it looking immaculate and then advertise it for her on some of the market websites etc.

If I am able to generate more than what the car currently owes, inclusive of the 70k Baht tax return, then it will be nice for her to have a little bit of cash in her pocket. Of course I wont mention it until the car is actually sold so as not to get her hopes up

I have concluded that this I the best plan of attack as opposed to just simply returning it to the finance company

Cheers guys and have a great day.

Just knock it out for the total outstanding debt sounds like you want to price it at the same level as all the others on the market ( whatever it is we still don't know) undercut them and move it on quickly.

Edited August 30, 2015 by kartman

[BarnicaleBob]

Keep in mind that any car purchased under the government scheme can not be sold for five years, even if it is paid off without repaying the government the rebate. So even if you sell the car for what it took to pay it off you still need to come up with the 70,000 baht to pay the government back before the title can be sold or registered into another person's name.

[stevenl]

Keep in mind that any car purchased under the government scheme can not be sold for five years, even if it is paid off without repaying the government the rebate. So even if you sell the car for what it took to pay it off you still need to come up with the 70,000 baht to pay the government back before the title can be sold or registered into another person's name.

Which is why the OP wrote 'inclusive of tax return'.

[mattk1]

Some more sound advice here guys, thanks again!

In answer to a few post questions, the car was taken on a 5 year loan and the I found my wife's sister paid 140k Baht down payment. The guarantor is her ex boyfriend.. hmm that could prove useful to know ha ha

Cheers again guys

[ericthai]

They just will stop her on the road, kick her out of the car, and repossess it.

If she cannot sell it (and she probably cannot because she owes too much and only put a minimum deposit on it)...then she is pretty much done. The worst thing she can do, is what many resort to....they borrow from a chinese lender, and let them hold the car. Then they run out with the chinese money and put a downpayment on another one....

true story...canadian guy's wife did this in udon.

Since you don't know anything about the exact situation here, your speculation is of no value at all.

Let me see if I understand then....

She cannot afford to make payments....correct? If so..she probably had somebody guarantee the initial loan and she put a very small deposit on the car.

Option 1: Sell it and Pay it off. How much was the downpayment?...(we don't know)...and if the car is over one year old, it has lost a great deal of value. Not likely she will get a price equal to what she still owes. She could make up the difference... if she had the difference, then she could afford payments. Most people with borderline income who buy cars do not put down large deposits. I bet her deposit was less that 80,000 baht...and somebody else guaranteed the loan. It is pretty normal.

Option 2: Don't sell it...borrow money and incur an even greater debt (which I am referring to). This will probably happen. Let's wait and see. According to the poster, she has not agreed yet to sell it. You can bet that the person who guaranteed the loan is pressuring her to make payment.

It is quite possible she has been late on payments. That would be similar to my canadian friend's wife who just had her car repossessed. Once again, I do feel there is an imminent problem of being repossessed. Now if this women wanted to simply turn in the car....the one who guaranteed the loan may still be on the hook for money.

Lots of presumptions on my part...but I gave an example of what happens when payments are not made for several months....and nothing is done. It can and will be repossessed.

Cars in Thailand hold their value much better than in the west. I bought a 2009 truck sold it 2 years later and actually put money in my pocket. I only put 60,000 down payment on it when I bought new. I had a friend do the same with his Camry. It was just a little over 1 year old and he had to return to the states so he sold it for enough to pay off the loan and made some money. Of course in both cases we sold to a private person and not a car lot.